International Truck and Engine Corporation Sets July 18 as Closing Date for Chatham Heavy Truck Assembly Plant
WARRENVILLE, Ill.--March 28, 2003--International Truck and Engine Corporation announced today that it would close its Chatham, Ontario assembly plant on July 18, 2003. The company made the announcement to employees today, reiterating that the heavy truck plant's closure was a necessary step to address competitive market conditions.
"We understand that this is not an easy time for anyone affected by this announcement," said Steve Keate, president of the company's truck group. "Even though we've been talking about this with employees for months, we realize that announcing a date signals the finality of closure. We sincerely thank our Chatham employees for their years of dedicated service of building quality trucks."
Keate stated that this action, along with others, better positions International to profitably serve its heavy truck customers and contributes to the company's goal of profitability over the business cycle.
"The decision to close the plant was never about the superior service our Chatham employees provide or the high quality trucks they assemble," Keate said. "Everyone knows that our Chatham employees build high quality trucks. The main issue has always been about cost and returning our heavy truck business to profitability."
In December 2001, International announced that it needed to find additional cost reductions to make the plant competitive and followed up with a formal "consideration to close" letter on April 5, 2002. In July 2002, the company reached a two-year contract with the Canadian Auto Workers union, which said the company would not close the plant before June 1, 2003. Unable to achieve necessary cost savings, International announced its plans to close the Chatham plant on October 17, 2002.
The Chatham plant is currently operating on one shift with approximately 900 employees. In addition to active employees, there are approximately 1,300 union employees on layoff status.
Production of International(R) 9000i Series Class 8 trucks will be transitioned from Chatham to the company's Escobedo, Mexico assembly plant. The Escobedo plant, launched in 1998, features the latest assembly technology and has a strong track record. The plant is both ISO 9000 and ISO 14000 certified, which underscores its commitment to high quality and environmental standards.
"We are confident that the Escobedo facility will continue to meet the standard of quality that our International products are known for and that our customers expect," Keate said.
International Truck and Engine Corporation is the operating company of Navistar International Corporation .
The projected costs associated with the closing of the Chatham facility were included in Navistar's fourth quarter restructuring charge. Final disposition of the assets of the Chatham plant once the final truck rolls off the production line has not yet been determined.
International Truck and Engine is the nation's largest producer of mid-range diesel engines, medium trucks, heavy trucks, severe service vehicles, bus chassis and a provider of parts and service sold under the International(R) brand. The company also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Additionally, through a joint venture with Ford Motor Company, the company builds medium commercial trucks and sells truck and diesel engine service parts. A subsidiary, IC Corporation, produces integrated school buses. International Truck and Engine has the broadest distribution network in the industry. Financing for customers and dealers is provided through a wholly owned subsidiary of Navistar. Additional information can be found on the company's web site at www.internationaldelivers.com.